Agribiz: Growing forest industry a sign good for global economy

I found an article discussing the global forest industry’s recovery from the five-year economic recession that has plagued everyone. It was interesting to read and I thought to share it because this is something that I have discussed over Christmas with my brother-in-law. He works as a chemical engineer for a paper company and he was commenting that the industry, or at least his company, was doing well.

The forest industry is an industry that is complex and huge, but it is a great way to “litmus test” the economy. Maybe there is a light at the end of the tunnel after all.

According to the article at growinggeorgia.com, the global forest products industry is slowly recovering from the economic crisis, with the Asia-Pacific region and China, in particular, leading the way.

New data published by the United Nations Food and Agriculture Organization indicate that, on average, global production of the main forest products grew by 1 percent to 4 percent in 2011 compared to 2010, showing that countries are slowly coming out of the recession.

Production of wood-based panels and paper in 2011, for example, was above the pre-crisis levels of 2007 and appears to be growing relatively strongly in most regions. Global production of industrial roundwood, or small logs, despite an increase of 3 percent in 2011 above the 2010 figure, has not so far reached the pre-crisis levels.

In the markets for pulp and paper, overall growth was very modest over the period 2007-2011, with a growth trend of about 1 percent per year. However, this conceals major differences at the regional level, where pulp and paper production and consumption are increasing significantly in the Asia-Pacific region, but generally declining in Europe and North America.

China is increasing its importance as producer of forest products, becoming the world’s second-largest producer of sawn wood after the U.S. and having overtaken Canada. China has also increased its lead over all other countries as a producer of wood-based panels, paper and paperboard. In 2011, China produced 11 percent of the world’s sawn wood, 38 percent of its panels and 26 percent of its paper.

China is also playing a key role in international trade in forest products as the largest importer of industrial roundwood, sawn wood, pulp and wastepaper and the largest exporter of wood-based panels. China is the fifth-largest importer of paper and paperboard, despite a huge increase in domestic production since 2007. In 2011, China’s imports of all forest products amounted to $43 billion and account now for 16 percent of the global total.

The structure of production and trade in the Russian Federation, the largest forest country in the world, has also changed in the last five years, with a decline in industrial roundwood exports by 29 million cubic meters or by nearly 60 percent and an increase in sawn wood production by 3 million cubic meters or by 8 percent. Over the same period of time Russia has increased its sawn wood exports by 13 percent.

A high proportion of Russian industrial roundwood exports previously went to China. However, the amount fell from 2007 to 2009 due to log export restrictions in Russia. Nevertheless, Chinese imports of industrial roundwood have recovered and some other major producing countries, including the United States, Canada and New Zealand, have expanded exports to China.

Source: Growing Georgia, growinggeorgia.com/news.

Michael Wheeler is county extension coordinator for the UGA Cooperative Extension in Hall County. You can contact him at 770-535-8293 or www.hallcounty.org/extension. His column appears biweekly on Thursday’s Business page and at gainesvilletimes.com.